G.R. No. L-22006 July 28, 1975
Basilio Perez and Petra Montalbo, petitioners, vs. Nicolas Mendoza, Margarita Macalalad and the Honorable Court of Appeals, respondents.

FACTS

Petitioners Basilio Perez and Petra Montalbo filed an action to quiet title over a parcel of land in Batangas, claiming inheritance from Estanislao Montalbo. They asserted that upon Estanislao’s death in 1918, the property passed to his daughters Petra and Felisa Montalbo. A 1934 partition allegedly divided the land between Petra and Felisa’s heirs, and petitioners later acquired Felisa’s share. They claimed respondents, spouses Nicolas Mendoza and Margarita Macalalad, were merely lessees who refused to vacate.
Respondents defended their ownership, tracing title from Felisa Montalbo. They presented evidence that Felisa exchanged the land with her aunt, Andrea Montalbo, in 1922. Andrea then donated a portion to the municipality and gave the remainder to her daughter, respondent Margarita Macalalad, upon her marriage to Nicolas Mendoza in 1927. Respondents possessed the land since then. A deed documenting the 1922 exchange was presented, though it contained a forged signature. Nicolas Mendoza was criminally charged for this but was acquitted on appeal due to lack of evidence of his personal participation in the forgery.

ISSUE

The core issue is whether the Court of Appeals erred in affirming the trial court’s dismissal of the complaint and its declaration that respondents have a better right to the property, despite petitioners’ claims of inheritance and possession.

RULING

The Supreme Court affirmed the decisions of the lower courts, ruling in favor of respondents. The legal logic rests on the conclusive nature of factual findings by the trial and appellate courts, and the preponderance of evidence supporting respondents’ chain of title.
The Court emphasized that it is not a trier of facts. Both the trial court and the Court of Appeals, after examining the evidence, found that an actual exchange of property occurred between Felisa and Andrea Montalbo in 1922, notwithstanding the defect in the formal document. This factual finding is binding. The acquittal of Nicolas Mendoza in the criminal case for falsification did not settle the civil issue of ownership; it merely established his lack of criminal intent regarding the forged signature. The civil case independently evaluated the evidence of the exchange.
The Court found petitioners’ evidence of inheritance and the 1934 partition unconvincing against the established facts of the 1922 exchange and the subsequent donation to respondents. Respondents’ open, continuous, and exclusive possession of the land since 1927, coupled with the tax declarations in their favor, bolstered their claim of ownership. The principle of res inter alios acta was also invoked, meaning a transaction (like the alleged 1934 partition signed by Andrea) between some parties cannot prejudice strangers (the respondents) who were not parties to it. The preponderance of evidence clearly established that the land had passed from Felisa to Andrea and then to respondents, severing it from the estate of Estanislao Montalbo long before petitioners’ claimed acts of ownership.